FROM IDEA TO BUSINESS

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FROM IDEA TO BUSINESS

Manual guiding you into business

Module 1:

BUSINESS PLAN


Module 2:

MARKETING RESEARCHES


Module 3:

BUSINESS
PLANNING


Module 4:

START

UP YOUR OWN BUSINESS


A
nnexes


Preparation
s

for establishing a small business


1.






Studentstarter

from student to entrepreneur by
transformation mini
-
companies into real
business

NL/06/B/P/PP/157 633


Edinburgh University Settlement

Terry
Ward
, e
t al.



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colofon



Title


FROM IDEA TO BUSINESS



Manual guiding you into business



Editors
:



Terry Ward, Jos Paulussse, xxxx, xxxxx



Lay
-
out
:



XXXX



Order address
:


E
EP bv
, Jagersweg 23, 5262 TM, Vught,



The Netherlands, jpa@planet.nl



Published b
y
:

Te
rry Ward Foundation
,
September 200
8


www.landstede.nl/studentstarter



©
xxxxxxxx, xxxxxx, xxxxxx

All rights reserved. Parts of this publication may be reproduce
d
, stored or transmitted in any

form un
der strict conditions of quotation of sources, publisher or authors.



ISBN. no.
xxxxxxxxxx






















This publication has been funded with

support from t
he European Commission.

This publication reflects the views only of

the author
s
, and the Commission can

not

be held responsible for any use which may

be made of the

presented

information.



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TABLE OF CONTENTS


Module I

Business Plan








7

Part
1.


Business name

Part
2.


Purpose of plan and summary

Part
3.


Details of the busi
ness

Part
4.


Management of the business

Part
5.


Products and services

Part
6.


The market

Part
7.


Employees

Part
8.


Premises

Part
9.


Vehicles, equipment and other assets

Part
10.


Legal

Part
11.


Quality

Part
12.


Environmental policy

Part
13.


Busine
ss objectives

Part
14.


Finance


Module
I
I

Marketing Research






15

Part 1:


Planning of the marketing research

Part 2:


Research in the company office

Part 3:


Planning of the field research

Part 4:


Drawing out of a questionnaire

Part 5:


Anal
ysis of the research data

Part 6:


Presentation of the data


Module
II
I

Business Planning







80

Part 1:


Role of the business plan

Part 2:


Basic elements of the business plan

Part 3:


Steps for receiving a credit

Part 4:


Concrete structure of t
he business plan

Part 5:


Practical guide


Module I
V

Start
-
up your own business




120

Part 1:


Understanding the system of the market economy

Part 2:


Preparation for establishing a small business

Part 3:


Development of a good business idea


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Part 4:


Specification of the physical and financial resources

Part 5:


Evaluation of the business idea and preparation of the technical and

economic

study of its feasibility

Part 6:


Preparation for starting the business


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Introduction


In frame of the Leona
rdo da Vinci project Studentstarter the project partners have
gathered materials from different situations, activities and sources to provide their
students and participants in education or training with applicable information to draw
up their business pla
n.

This product is a compilation of different materials brought together by a lot of
workers in several European Commission projects. We want to thank all of them for
the materials partly received from project partners, partly found on the Internet and
so
metimes of partners institutes.


There are 4 main parts.

Each chapter has been divided into sub chapters and the sub
-
chapters have been dived
into paragraphs. We expect that the users will be able to keep an overview on the
materials, tables and example
s.

Users will see that the examples originate from different countries and that the
numbers and methods of calculation not always will be in line with the local situation
in the country of the users.


Each sub
-
chapter indicates learning goals, workload t
o finish the unit, required
previous knowledge, supporting materials and the body text to explain the subjects.


To establish a company entrepreneurs
have to take some legal steps. These procedures
for different countries have been explained in the resea
rch report also available on the
web site of Studentstarter.


We consider this book as a growth
-
book and if you have modules, chapters or
examples that can be added to this compilation please send us your copy

or
manuscript.
Additional information can be
published via the project web site and it is
aimed to present on this website links and applicable information for entrepreneurs.


The European Commission aims to stimulate and to support the development of
entrepreneurship and has presented several repor
ts on this item. We will present
useful
reports via our site.


This reader is now in English. Our partners in Bulgaria and Spain and The
Netherlands
and Belgium will put available their modules and examples in the national language on

the website of Stude
ntstarter.


It is all about business and how to get started. Once you have started and you have
experience you might evaluate your original business plan. We are interested to learn
what kind of information you have missed, what kind of support you had re
quired
developing your business plan and how can we
stimulate

entrepreneurship
among
students in VET. Send us your experiences, opinion and ideas.

Jos


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Module 1: BUSINESS PLAN









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Module 1: BUSINESS PLAN


1.

BUSINESS NAME


Business Name




Prep
ared by: (your name)



Date:


2.

PURPOSE OF PLAN AND SUMMARY



Why are you writing this plan?



Who needs to see the plan?



Do you need to access funding?



Give a general explanation of what the product or service is to be,
what staff you will have and who you will

market your product/service
to.


3.

DETAILS OF THE BUSINESS

Business Name



What is your official business name or intended name.

Contact Name



What is your name?

Address (Home & Business)



What is your address?



In the case of a limited company, your registere
d office



For sole traders and partnerships, it is where legal documents can be
served; this if often your home address.


Website




What is your website address?


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Telephone No. (Home & Business)



What is your business telephone number?

E
-
mail address (Home &

Business)



What is your business e
-
mail address?

Legal Status



What type of business will you have?



Sole trader



Partnership



Limited Liability company



Co
-
operative

Date of start or proposed start



When do you plan to start?



If not known precisely, give an a
pproximate date.

Name(s) of partners or other director(s)



If you are trading as a partnership, give the names of the other
partner(s).



If you are trading as a limited company, give the names of the other
director(s).



If are trading as a co
-
operative, give
the names of the other members.


4.

MANAGEMENT OF THE BUSINESS

(Only necessary if different from business)


Name



What is your name?


Address



What is your home address?


Telephone No.



What is your home phone no.?



Include mobile phone if you have one


Date of

Birth



When were you born (may be important for grants e.g. Prince’s Scottish
Youth Business Trust, 18
-
25 year olds)


E
-
mail



What is your personal email address?



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Qualifications



What qualifications do you have?



List as many as you can, even if they are n
ot directly relevant to your
business.


Work Experience



What previous employment have you had?



What business or management experience did you gain?



If you have previously run your own business, what type of business was
it and what happened to it?



Please a
ttach your CV as an appendix


Training



Skills Analysis

-

Review the skills of managers and others to define their
training needs.



Training Needs Analysis

-

What type of training do you need to give to
operate your business? Give a training schedule.


A
dvisers Consulted



Who have you spoken to about your proposal
-

accountant, solicitor,
bank manager, Enterprise North East Trust etc?


5.

4.

PRODUCTS AND SERVICES



What products or services will you offer?



Be specific


describe the individual products or servi
ces, or groups of
products or services.



If you are involved in manufacturing, what raw materials will be used?



Where will you get supplies?



What are the manufacturing processes?


6.

5.

THE MARKET

Market research



What market research have you carried out (e.g.

talking to customers,
questionnaires, and market reports)?



Demonstrate that you have researched that a market exists for your
products or services, and that customers will buy from you



As a result of the research, how are you going to proceed?

Customers



W
ho are your customers?



How would you describe your typical customers?



How old are they? Give the approximate age groups if you can.



Is there a split between men/women?



What sort of life style do they have?



Where are they located?


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If you are selling to ind
ustrial markets, what type and size of business will
you be dealing with?


Geographical area covered



Where will you offer your products and services?



What geographical area will you cover? Be as specific as you can.


Size of market



Estimate the total numb
er of potential customers for your
product(s)/service(s) within the geographical area.



Is the number of customers expanding, static or declining?



If static or declining, how will you get more business?


Competitors



Who are your main competitors?



Where

are they located?



What are the strengths and weaknesses of each competitor?



Can you identify areas where you can develop a competitive
advantage over them?


SWOT Analysis



Business SWOT
Analysis
-

An analysis of your business, relating to its
strengths, we
aknesses, opportunities and threats.



Competitors SWOT
Analysis
-

An analysis of your competitors, relating to
its strengths, weaknesses, opportunities and threats.


STRENGTHS





WEAKNESSES

OPPORTUNITIES





THREATS




Why will customers buy from you and

not from your competitors?



How will you be different from your competitors?


Pricing



How did you arrive at your pricing policy?



Give examples of what you intend to charge for the
product(s)/service(s) you will be offering.



What margin will you get on your

products or services?



Which products or services will make the most money?


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If you offer a mobile service, how will you manage travelling time?



Will you use a price range, e.g. economy, regular and luxury?


Distribution



Will you sell direct to customers, f
rom a shop, internet or some other
method?



If you are selling products and also intend to deliver to customers, how
will you achieve this?



Will you use your own transport or contract others to do it?


Design and packaging



If packaging is important in you
r business, say how you intend to
package your product(s)



Will you use a logo or a certain typeface?



How will your stationery, vehicles, premises and uniforms will be
decorated?



Put examples in an appendix at the end of the Business Plan


Promoting the b
usiness



How will you promote your business?



What methods will you use (e.g. advertising, fliers, personal selling,
networking, business cards)?



Where will you promote your business (e.g. particular towns,
newspapers, and housing estates)?



What do you inten
d to say in your promotional activity?



When will you carry out the promotional activities?



What do you want to achieve by doing it (e.g. discount offered to get
more new customers)?



How will you target customers for personal selling?



Do you have an E bus
iness strategy?


7.

EMPLOYEES



What employees do you intend taking on now and in the near future?



When will you do this?



What positions will they hold?



What will be their responsibilities?



What will be their rates of pay?



How will you recruit them?



What traini
ng will they need?



How will you train them?


8.

PREMISES



Are you going to work from home or from business premises?



Describe the layout of the premises (e.g. number of rooms, facilities,
equipment)


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If working from home, have you obtained the necessary permi
ssion?



If working from business premises, have you already obtained them?



What rent and rates are involved?



Is the property owned or leased?



If leased, how long is the lease for, and when is it renewed?



What conversion work is needed?



When will this be c
arried out?


9.

VEHICLES, EQUIPMENT AND OTHER ASSETS



What assets will you be bringing to the business (e.g. a computer,
vehicle, tools and equipment etc.)?



List individual items and give a realistic assessment of their value



What other assets will you need
for the business?



When you will need them?



Where will you get them?



How much will they cost?



How do you intend to finance their purchase?



What equipment will you need to conduct all your communications?
(e.g. phone, fax, computer)



10.

LEGAL



Do you need plan
ning permission or building warrants?



Any environmental health issues?



Do you need insurances e.g. public liability, product insurance,
accident or key man insurance?



Do you need to pay any membership or qualification fees?



Are there any legal requirements

specific to your business?


11.

QUALITY



Will ISO9002 be relevant to your business?



Will you be an “Investor in People”?


12.

ENVIRONMENTAL POLICY



Do you have waste products to dispose of e.g. tyres, grass cuttings,
water?



Are you aware of the legislation?


13.

BUSINE
SS OBJECTIVES


Vision for the future



What estimates do you have for approximate turnover and profit
estimates, year by year?



Do you plan to introduce any additional products or services?



Do you plan to introduce any new staff?


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Do you plan to introduce any

new premises?



Do you plan to introduce any new equipment?



When will these be introduced?


14.

FINANCE

Start up costs



List your start up costs


Personal contribution (cash and assets)



Indicate here what you will be investing in terms of both the cash you
will
be putting into the business and assets, such as vehicles and tools
and equipment, which you will be bringing to the business as a part of
your capital contribution.



Put a realistic value on the non
-
cash items.


Financing the remainder



If there is a gap
between what you require in total and what you are
contributing, indicate how you intend bridging the gap.



Do you intend borrowing money?



If so, how much?



From where?



On what terms?



For how long?



Do you intend applying for any available grants?



If
so, how much?



From where?


Security against borrowing



If you are borrowing money, what will you offer as security (if required)?


Financial projections



The
cash flow forecast
is a calendar of cash that flows in and out of
your business. You use it to esti
mate any short
-
fall and make
arrangements to get more sales, reduce spending, or borrow money
when needed.




The
profit & loss

shows how much profit you will make.




The
balance sheet
shows the value of your business.




MAKE AN APPOINTMENT WITH YOUR ADVISOR W
HO CAN HELP YOU TO
COMPLETE THE PROJECTIONS!


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Module 2: MARKETING RESEARCH


Title of the module

MODULE: MARKETING RE
SEARCHES

► 3 CREDITS

►45
PAGES

Units numbering (lectures and topics)

Part 1: Planning of the marketing research

Part 2: Research in the company office

Part 3: Planning of the field research

Part 4: Drawing out of a questionnaire

Part 5: Analysis of the researc
h data

Part 6: Presentation of the data



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Content map of the lesson

Part 1 Planning of the marketing research

1.

Survey of the market and taking a decision

1.1.

What kind of business decisions are the marketing managers engaged with?

1.2.

Test of information suit
ability

2.

Carrying out of the marketing research (research plan):

2.1.


Analysis of the necessary conditions for carrying out of the research

2.2.


Identification of the research goals

2.3.


Necessary information for implementation of the goals

2.4.


Research methods:

2.4.1.

Prim
ary and secondary information sources

2.4.2.

Quantitative and qualitative data

2.5.


Research guide and reporting of the results

2.6.


Terms

2.7.


Budget for carrying out of the research

3.

Necessary resources for carrying out of the research

3.1.


Analysis of the documents

3.2.


Tele
phone questionnaires

3.3.


Direct questionnaires

3.4.


Group discussions

3.5.


Researches via post

3.6.


Analysis of the data
.


Part 2: Research in the company office

desk research

1.

Carrying out of the research from the office

1.1.


Choosing a sample

1.2.


Receiving of additiona
l information about the products

1.3.


Ensuring of the economic base of the research

1.4.


Estimation of the size and market trends

1.5.


Providing of information about the companies

2.

Where can we look for data?

1.1.


The State and the Central Statistic Organization as in
formation source

1.2.


The custom’s and excise offices as information source

1.3.


The agencies for regional development and business centres as information


source


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1.4.


Chambers of Commerce and Industry as information source

1.5.


Industrial Associations as i
nformation source

1.6.


Reference books as information source

1.7.


The press as information source

1.8.


Commercial magazines as information source

1.9.


Your own company as information source

1.10.

The reports on marketing studies as information source

3.

Searching of pub
lished information about the market size

4.

Searching of information by using of current data bases


Part 3: Planning of the field research

1.

Classification of the field research

1.1.


Direct (live):

1.1.1.

Investigation of customers:

1.1.1.1.

Quantitative: street inquires; home

inquires; on specific places;
hall test.

1.1.1.2.

Qualitative: group discussions; similar inquires.

1.1.2.

Investigation of companies: inquires on working places; clinical
investigations. Group discussions; questionnaires.

1.2.


Telephone interviews:

1.2.1.

Distance;

1.2.2.

With visits or
mail survey

1.3.


Non
-
inquiry methods:

1.3.1.

Mail survey;

1.3.2.

Observations.

2.

Choice of the appropriate methods of field research (criteria)

2.1.


Type of the searched information

2.2.


The people to be interviewed

2.3.


Requirements to the inquiry

2.4.


Resources

3.

Choice of the sample of t
he interviewed people

3.1.


Who will be interviewed during the field research?

3.2.


What will be the number of interviewed people?

3.3.


What is the selection of the interviewed people?

4.

Planning and monitoring of the interview programme

4.1.


Engagement of teams for carry
ing out of interviews.

4.2.


Instruction of the investigators.


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4.3.


Printing of the questionnaires.

4.4.


Sending of the questionnaires.

4.5.


Monitoring and discharging of investigators.

4.6.


Monitoring and quality control.


Part 4: Drawing out of a questionnaire

1.

The role of t
he questionnaire

2.

Types of questionnaires

2.1.


Standard

2.2.


Semi
-
standard

2.3.


Specialized

3.

Basic principles for drawing out of the questionnaire:

3.1.


Paying attention to the objectives all the time

To assume the feeling of the
subject

To formulate the questions

Clarifying what is to have in mind in
drawing out of the questionnaire

What should we avoid in drawing out of the
questionnaire

Specifying of the questionnaire

Systematizing of the
questionnaire

3.8.


Real testing of the questionnaire

4.

Rules for drawing out

of specialized questionnaires

4.1.


Non
-
standard free questionnaires

4.2.


Questionnaires for telephone inquiries

4.3.


Questionnaires for individual filling in

4.4.


Selecting of the people to be interviewed

4.5.

Questionnaires destined for companies’ inquiries


Part 5: Analysis

of the research data

1.

Editing of the questionnaires

2.

Coding

3.

Confirmation of the data

4.

Counting

5.

Drawing a table

6.

Results from the table

7.

Checking of the table


Part 6 Presentation of the data

1.

The art of personal presentation

2.

Presentation of quantitative info
rmation


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2.1.

Using of tables

2.2.

Using of schemes and diagrammes

3.

Presentation of qualitative information

4.

Preparation of an effective report about the marketing research

4.1. Structure and contents of the report

4.2. Good style

4.3. Punctuation





Part 1

Planning
of the marketing r
esearch

Learning goals

The goal of this part is to give a look in the secret of the planned marketing
research showing of the necessity of the marketing researches in connection
with taking of business decisions; we show how to plan the
carrying out of the
research and at the end we show the necessary resources of the research
itself.


Indication of workload required to finish the unit
:

Strictly individual in conformity with the individual characteristics of the trainee

Previous knowledge

required to complete the unit:

Good general knowledge

List of what the learner needs to have at hand:

Computer and Internet access

Body of the text

1.

Survey of the market and taking a decision



The marketing research is a process of collecting, analyzing
and interpreting
of marketing information. Before examining the way of carrying out a
marketing research we have to see why marketing information is necessary
for the business.

The business needs taking o decisions all the time through. Some if these
de
cisions are trivial with short
-
term consequences and nothing bad will
happen if they are wrong. Other decisions have impact on the long
-
term
perspectives and refer to the survival of the undertaken business. The
necessity of information is common issues be
tween them, regardless of their
scale.

Imagine that you are on an excursion in the mountain. You reach a path fork
and you do not know which way to follow


to the right or to the left. You will
take the decision on the base of the available information y
ou have at the
moment: what was the previous path you have walked along to reach the
path
-
fork; which of both paths is more beaten; what is seen forward, etc. You
may take a wrong decision and to fall down a precipice. Then you will realize

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that the misfor
tune is due to absence of information. Map of the mountain
would prevent this misfortune.

The marketing research is one of the business “cards” of guidance for the
person who takes decisions.

It is so in business. The information is necessary to increa
se the chances of
taking the best decision. Of course this is not a guarantee that you will reach
your end goal. It is possible on the map not to find the exact detail you need or
the map may be too an old one.


Obviously, the marketing researches are cl
osely connected with the market
than with production, human recourses management or the finance issues.
But due to the fact that marketing takes a central position in every business,
the consequences from the marketing researches inevitably go beyond its
b
oundaries and have an influence on all other activities. Still more, the
methods used in marketing researches may be applied also in other areas, for
instance personnel management, which is a theme beyond the scope of the
discussed subject.


1.1.

What kind of
business decisions are the marketing managers engaged
with?


Some

of

the

usual

spheres

of

taking

decisions
,
where

the

marketing

research

may

help
,
are

as

follows
:


Opportunities
:



What kind of product can we offer?



What will be its name?



What will be its
price?



To which group of customers shall we offer it?



How will the product reach our customers?



How shall we convince our customers to buy our product and not the product
of our competitors?

Estimation:



Can we increase the sales of our product?



Can
we increase its price?



Can we offer it to another group of customers?



Should we change the way our product reaches the customer?



Should we change the way of offering the product?

Solving

of

the

emerged questions:



How can we increase the profit of a
product?



How can we change the trend of decreasing the sales?



How can we answer the increased needs of our products and services?

Every

sphere

of

taking

decision

includes

a

choice

between

several

opportunities

and

for

this

purpose

information

is

necessa
ry. It will define the

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results fro each of the opportunities. Many decisions are taken on the base of
previous decisions and guesses or by using of incomplete information. The
chances of making the best choice are increased when we have reliable
informatio
n.

Let us think also about one more sphere of taking a decision: “How can the
entrepreneur increase the profit from a given product?” This is a very often
problem and for it’s solving there are three strategies in principle, which may
be used separately o
r in combination:



To sell bigger quantities from the product;



To increase its price;



To decrease its prime costs.

There is one more opportunity, the fourth, to change the method of
accountancy in order to report better profit, but it is inapplicable f
or the
marketing research.

We need information in order to decide which of these opportunities to
implement in practice. Such information could be taken from past researches
or to collect it from now on. The information necessary for taking of decision
a
bout the possibility of increase of the profit from a given product could be the
following:

Sell more
:



The size of the whole market where we sell;



Our existing market share;



Availability of our product (type of retailing)



Customer knowledge about our pr
oduct
;



Attitude towards our product.

Increase the price:



The prices of the competitors comparing to our ones;



The customer understanding and “evaluation” of our product in comparison
with that of the customers:



The effect from the increasing of the pric
e to the willingness of the customers
to buy and the sales amount;



The effect from the increasing of the price to availability / distribution in
retailing.

Decreasing of the costs:



Do the customers accept the changes in the product?

Every business face
s marketing problems. Write down such a problem
existing in your organization (or think out a problem) on the worksheet of
Figure 1.1.
on the left free place and describe the whole information you can
remember (a part of which you may already have), necess
ary for the solving
of this problem. First of all think about the problem more generally and you will
see that for a short time you will be able to fill in all of the rows.

After that, opposite each point of information mark the level of knowledge


high


you are sure that the information is full and enough precise; middle



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1

you know something but it is incomplete or of dubious correctness; low


you
know nothing.


Figure

[
1
]
.
[Part
1].
Worksheet:

Marketing problem.


For

facilitation

of

your

work

we

gi
ve

you

a

list

of

spheres

usually

included

in

developing

a

marketing

research
.


The market
:



Total size of the market;



Who are the customers (customers’ profile)
;



Needs and requirements of the customers;



Segmentation of the market in relation to territory,

customer groups, needs
and requirements;



Trends


growth or decline of the market
.

Market structure:



Main participants



local producers, importers;



Distribution by trade marks;



Shares owned by the biggest participants (trade marks);



How is the marke
t attended?



distribution networks
;



Main distributors and retailers;



Trends

of

growth

and

decline; why (reasons)



Suppliers and trademarks:



How do the suppliers work at the market?



Why do they succeed (or why do not they succeed?)



The customers’ att
itude towards the image of the suppliers and the trade
marks.

The product:



Types of products, sold at the market;



What do the products differ from one another?



Connection of the products with market segmentation;



Degree of product innovation;


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Life

cy
cle

of

the

product



how

long

is

each

cycle
?




How does the product satisfy the customers’ needs?



The satisfaction of the customers from the products;



Necessity of product development (change);

Development of a new product:



Unsatisfied needs which our p
roduct will satisfy;



Acceptance of the new product as a conception, prototype and at the end
stage of development;



The package of the new product;



How will be the new product offered at the market?

Determination of the price:



Current price structures;



Past trends;



Attitude and sensitivity of the customers in relation with pricing;



Customers’ expectations in relation with product prices;



Expected changes in sales number as a consequence from the changes of
prices.

Distribution

(
retailing
):



Policy of

stockpiling



Repetition of orders;



Achieved levels of distribution;



Expected supplies;



Attitude to suppliers, their products or services;



Marketing and product policy.

Methods of selling
:



Attitude of the customers to the used methods;



Evaluation of t
he different methods;



Connection of the market potential with organization of sales;



Organization
;

Advertising:



Evaluation of the advertisement campaigns;



Audience reached by the advertisement;



Testing of the new advertisement, before (after) its use;




The relation between the advertisement and perception of the product (trade
mark).

After

having

been acquainted

with

this

list

of

areas

of

the

marketing

research

you

have

to

go

back

to

the

question

of

information

needs of your own
company. Are there any
other needs to be satisfied by the information,

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obtained from the marketing research and will it help the entrepreneur in
taking decisions.

This section shows you the wide range of information the entrepreneur needs
to deal with marketing issues. Remembe
r that the process of obtaining of
information is necessary to help you reaching of a certain decision, but it is not
an alternative of the process of taking decision.

1. 2. Test of information suitability.

The

gathered

information

should be connected w
ith the decision. Many
companies are wandering without information, but plenty of information also
might be dangerous. Gathering of information are means but not an end
purpose and its value depends on its compliance with the decision (as far as
this infor
mation has an influence on taking of this particular decision).

Let us go back to the marketing problem, which was determined in the
company and the evaluation of information suitability necessary for your
business. Some parts pf the information, which t
heoretically respond to the
problem, may not be particularly suitable for your business. For instance, we
suggested that the market size evaluation might be of great importance for the
sold quantity of a certain product. In case, that your market share is
50%, it is
important to know whether this size is approximately 80 million or 90 million
Euros per year. But if you are a very small participant the size of the whole
market (rough estimation) will be of small importance. Apply the suitability test
for eve
ry information, which you intend to gather.

Particularly, in the market research the test is applied for given information,
which will help you to taking of decision. If according to this test the
information is useless, it is useless to spend time for its

gathering.

By using the suitability test some information areas may be excluded although
you have thought that they might be useful. This helps to see the advantages
of those information areas that remain and they can be classified according to
their impo
rtance. Without using the suitability test there is a risk the
information gathered at such a price and during such time that it will not be
helpful inn taking decision.

Not only the business or the company needs marketing information. Charity,
for instan
ce, collects funds by means of marketing activities and also needs to
know why do people respond or not respond to the requests. An organization,
which offers to its members a performance of household work for money
during spare time, may face decreasing a
ctivity of its members. The necessity
to understand this trend and to change it in favourable direction imposes to
carry out such a research. The political parties also need researches in order
to know how their potential votaries adopt what is offered to
them.

2. Carrying out of the marketing research
:
research plan


Everybody who carries out a marketing research should gave a plan


description of what, why, when and how has to be done. If the research is
going to be performed by an external organizatio
n, the plan is prepared and
presented by this organization before the official assignment of the research.
The proposal is an answer to the requirements submitted by the client. These
requirements are not formal documents, although it would be nice to such

a
document.


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The company marketing specialist also needs a research plan. He does not
need “to sell” the research in the same way as the external supplier of a
marketing research. The existing practice requires the specialist to prepare a
formal and clear
plan, which should be designated to the person who will carry
out the research and for the colleagues in the company. Thus everybody, who
is interested in the activity, can understand what has to be done in connection
with the research.

The elements of th
e research plan are as follows:



Analysis of the necessary conditions of its carrying out;



Identification of the research goals;



Information necessary for reaching the objectives;



Methods of research;



Management of the research;



Reporting;



Terms;



Exp
enses.

The

document
,
which

explains

the

research

plan
,
is

not

obligatory

to

be

formed

so

that

the

parts

should

correspond

to

each

of

the

elements
.

The
different specialists have different styles. But regardless of the form all the
elements should be inclu
ded in a detailed plan.

A detailed presentation of a research plan:

2.1.

Analysis of the necessary conditions for carrying out of the research.

It should:



Give some explanations about the complexity and the difficulties of the
business, which is the subjec
t of the research;



Describe

most

briefly

every

past

event
,
which

has

influenced

the

present

situation;



To

show

the

present

state

and

to

what

extent it corresponds to the
wider goals of the business:



To outline the available opportunities for the selectio
n of decision;



To show the information, which is available, and the degree of
confidence in it.

Figure 2.1.
is an example of such an analysis.

The product is left unspecified
deliberately in order to urge the trainee think over the general principles and

not for the concrete case.



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Figure

[
2
].[
Part
1].
Exhibit

analysis of the necessary conditions for
carrying out of the research


The first paragraph shows that the company manufactures a certain product,
faces some obstacles as a result of changes in m
arket conditions (because
the production is not flexible) and generally acquaints us with product sales.
This short story presents the problem: sales are very low to withstand
production costs. The future opportunities of choice are outlined.

The
available

data show that the company wo
r
ks

a little bit better that the other
producers, which proposes that its activities are partially reasonable. Note that
only data about the sales of domestic producers are provided and there is
nothing about the import or the

domestic market as a whole. The data about
the process are also accessible.


The exemplary analysis on
Figure 2.1.
is enough to help us to plan the
research purposes, to help the management of the company to choose the
optimal decision among the submitte
d opportunities.


Before staring the examination of the next element of the research plan
(description of purposes), we should prepare our own analysis of the
necessary conditions the for research implementation. The worksheet on
Figure 3.1.

may be used
with some sub
-
titles. In any case try to fit into one
sheet.



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Figure

[
3
].[
Part

1].
Worksheet:

analysis of the necessary conditions for
carrying out of the research.


2.
2. Identification of the research goals.

The description of the research goals shoul
d include that, which will be the
result of the research implementation. These goals should correspond to the
business requirements, overviewed during the previous stage and more
precisely


they should provide information corresponding to the possible
cho
ice. They should be precise but not too detailed.

Turning back to the example about the producer of household appliances, we
can assign four possible goals of the investigation:

А)
To provide an analysis of the market of household appliances of this type;

B
)
To estimate the customers’ attitudes towards the company products and
company competitors;

C
)
To estimate the effect from the import of similar household appliances on
the m
arket;

D
)
To provide data, which show the reasons of product’s sales decline and
which will help the company to estimate:



The means for increase of sales volume in future;



The opportunities for increase of prices.

Point A is very big and vast. It requi
res complete market information; in any
case not everything will be of use for the company. Still more, the investigation
is connected with precisely determined company needs. It seems also, that
there is a mistake also in another direction. The scope of d
ata is not specified
and therefore we can admit that the whole accessed information corresponds
to the goals. It would be possible in the end of our activities to be sure that the
goals have been achieved.

The problem of points B and C is that they are too

concrete. The truth may be
hidden also in the attitude of the customers towards the company product and
in the fact that the import has conquered the market. Probably both points
need investigation, but for the solving of the problem may contribute also
f
actors, which we have not even, thought of.

2.
3. Necessary information for implementation of the goals.

It is important to make a distinction between the information necessary for the
achievement of the goals and the goal itself. The goal is a means for
provision

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of data connected with marketing problem but in its essence it does not show
what should be discovered by the investigation.

Probably time and expenses will limit the research, but for sure it is necessary
to compromise with thoroughness and wid
th of searched information. On the
other hand, we have already part of the information.
Figure 4.1.
shows an
exemplary presentation of the necessary information for achievement of the
investigation goals, in the case of the company producing household
appl
iances. The whole presented information is in connection with the answer
to the question why the sales have been decreased and with the evaluation of
some versions of choice.

The information in the exemplary presentation of the goals is not thorough. In
s
pite of this, it would be two times longer, if we have not estimated what is the
major issue in it. Even in this presentation it might be too vast. That is why the
weight should fall on one of the two areas


those that look to be most tightly
connected wi
th the formulation of a successful business decision.


Figure
[
4
].[
Part

1].
Exhibit description of the objectives and provision of
information, necessary for carrying out of the research on household
appliances.


The planning of the information scope o
f the research is an attempt for
building of a hypothesis. Each area the information is referred to suggest a
hypothesis of the reasons of problem the business faces. Working out a
hypothesis is a creative act, which is based on the knowledge and
understan
ding of the situation. Theoretically there are unlimited numbers of
hypotheses, which explain the given problem. But based on our own
experience and our understanding of the circumferences we may try to outline

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some with most probability and to classify t
hem according to their importance.
Then the limited budget of the research and the time of its realization may be
determined in the best way.

At this stage we can prepare our own exemplary presentation of the goals of
the information scope of the organiz
ation (really or conditionally).

2. 4. Research methods.

The research methods as a component of the plan describe how the
investigation process will run. The means necessary for gathering of
information for a research are the subject of the following sect
ions.
Unreservedly it is necessary to know may be received from analysis of
documents, how to plan the field research, the role of the questionnaires and
their usage during the inquiries. All this form that part of the plan connected
with the research meth
ods. Some notes are necessary in relation with the
different types of searched information and its influence in choosing of
methods. The information sources for the research are classified as primary
and secondary. It is convenient to discuss them in the r
everse order.

2.4.1. Primary and secondary information sources:

The secondary information is this, which has been already collected, usually
for purposes that are not directly connected with our own needs. As a whole
the information may be found in some p
ublications or it is accessible by
analysis of documents. The information of this kind is more general and
factual than detailed. From the published sources we can obtain an estimation
of market size of appliances and the import share at this market. But i
s
unlikely to receive data about the attitude of the customers towards the
appliances and the concrete brands. The second type of information requires
the carrying out of specialized researches among the customers of
appliances
,
in other words


primary in
vestigations. The primary investigation
may also be necessary for collecting of general and factual information, or at
least to specify the data, which are uncertain or too wide.

2.4.2. Quantitative and qualitative data:

The quantitative data are an impor
tant part of the process of taking marketing
decisions. Without them we cannot not be able to have an idea of the market
size] about the shares of the different production brands; about the level of
information of the customer about the individual brands a
nd their use. The
number of methods, which we may use for collecting of the necessary
quantitative data, is significant. In most cases they include a great number of
questionnaires for carefully selected groups of people or organizations. The
method for ga
thering of data usually includes the usage of standard
questionnaires for direct or telephone interviews. An investigation via post
although that there are always doubts about the reliability of the interviewed
group. Each of these methods is described in
the following sections.

The qualitative data are also an important part of the marketing research. In
contrast to the quantitative data, the qualitative ones are connected with the
understanding of the essence of the research subject. They are far more
co
nnected with the attitude and the motivations. The accent here is in the
answers to the questions ”why” and “how” and not on the figures. Examples of
this type of data include:



How do the customers feel the usage of the appliances?


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What are the attitudes
, which determine the buying of the product?



How is one brand accepted in comparison to another one?

The qualitative data are connected with the attitudes, but not all data about
the attitude are qualitative. To the question “What do you think about the

appliance of this brand?” the easiest way is to approach in a qualitative way,
while the answer to the connected question “Which brand do you prefer to all
other brands?” requires a quantitative approach of a reliable statistic group of
people.

Sometimes

qualitative data are used for creating of hypothesis, which
afterwards are tested by more precise quantitative methods. In practice the
qualitative research is often used as an independent method, nevertheless
that its results have limited reliability, ju
st because they are qualitative.

There are a significant number of qualitative methods, from which the market
researcher may make his/her choice for decision, but until now the mist used
method is that of the group discussions.

In planning of the researc
h methods you have to determine the type of the
interesting information (primary or secondary, quantitative or qualitative) and
its reliability.

In conclusion, the planning of the research methods requires determining
what kind of information is necessary
, as well as its reliability.

The information may also be:



Primary or secondary data;



Qualitative or quantitative data.

Now we can again turn back to the information provision of the company


a
producer of electric household appliances. It is presen
ted on

Figure 5.1.
The
consequences

from
the

choice

of

appropriate

methods

are

explained

in

the

comments.


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Figure

[
5
].[
Part
1].
Provision of Information and selection of method for
the research of electric household appliances.


It is necessary to menti
on that there is an uncertainty in choosing a method;
that often there is not only one ideal approach. The proposed research
activities are too wide and their information provision may have a need of a
second re
-
examination, especially referring to the cos
ts it will arouse.

In the methodological part of the research plan there should be done a
schematic description of the research tasks to be carried out and should also
include listing of the techniques (methods) of the inquires and the sample
sizes.
Figur
e 6.1.
gives an exemplary description of the market research of
electric household appliances. The plan is rather schematic than a detailed
one, but at the stage of general planning it is enough. All investigation
methods are presented in details further o
n.


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Figure

[6].[
Part

1].
Exhibit

methods of market research of electric
household appliances
.


Just now you can draw out the plan of research methods in order to ensure
your own determination of the goals and provision of information.

2.
5. Research gui
de and reporting of the results



The research guide and the report in accordance with it require only short
mentioning in the research plan. The research guide should indicate who
bears the whole responsibility for it, who will be included in it and what
other
sources, if any, would be necessary.

At the stage of the research planning it is advisable to think how the
conclusions of the research will be connected with taking of marketing
decisions. The opportunities for a choice include a written report or
oral
presentation. The both approaches are often used together.


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Figure
[
7
].[
Part

1].
Exhibit description of conducting the research and
reporting of results.


2.
6.
Terms

The determining of the time schedule is a necessary part of every research
plan.

They should be realistic, so we can believe in their observation.

Keeping the schedule in practice means:



Determination of the time necessary for the finishing of the research tasks
using the available sources;



Determination of the deadlines for taking
of decisions, which are the subject of
the research.

The
deadlines may be
imposed by extraordinary circumstances, for instance if
the research is connected with a purchase of a given company or merely a
whim of the management team. Indeed, there is a cont
radiction between the
time necessary for the implementation of a qualitative research and the
deadline setup by the management team, who needs the information. But it is
better not to carry out a research at all, if it will obtain incomplete and incorrect
information.


Figure 8.1.
shows the Exhibit term of the investigation of the internal market of
electric household appliances. The used sources are also shown. Depending
on them some of the determined activities could be carried out consecutively
or simu
ltaneously.


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Figure [
8
].[Part 1].
Exhibit

period of research implementation.


2.
7. Budget for carrying out of the research


Always calculate the expenses necessary for the research. The expenses are
always a part of the research plan even when the grea
ter part of the work will
be done by the internal team of the company, who will receive additional
payment (although it is more acceptable to determine the amount in time, not
in money). The determination of the correct costs depends on the real
estimation

of the necessary funds.
Figure 9.1.
represents a convenient
worksheet for expenses evaluation.


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Figure [9].[Part 1].
Worksheet:

Exhibit

plan of calculation of expenses.


It is accepted that some of the services will be bought as the inquiry;
additional

personnel, evaluated by internal tariffs, will do another part. It is not
allowed to add reserves to the budget


this is done if a profit is foreseen from
the work.

After estimation the value of the research, it has to be compared with the
available budg
et defined for the purpose. This naturally reflects on the
available funds, but the entrepreneur has to take into consideration also the
potential benefit from the research.

The expenses should be considered I direct relation with the profit or loss due
to

the marketing decision taken as a result from the research. For instance, if
the research motivated us to take a decision for investment of 50 000 Euros, a
budget of several thousands or more Euros would be too big. If the investment
is about 500 000 Euro
s a bigger budget is acceptable for the research. In
practice, the evaluation of the approximate recurrence of the investigated
money is not easy. Especially, when the research suggests different
opportunities. But in all cases until the implementation of
the research the
knowledge about the business opportunities is too small.

In some cases the estimated costs of the “perfect plan” for investigation are
more than the available budget or profit. In these cases the methods for
investigation should be chang
ed or the scope of the searched information


limited. This is easily seen from our example of electric household appliances.
It is important to know that shortening the period of research as well as the
decreasing of the budget may cause worsening its qua
lity to such an extent,
that it would have been better not to carry out the research at all.


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3.
Necessary resources for carrying out of the research

The key means of carrying out of every marketing research is the specialized
expertise. An important deta
il for carrying out a marketing research is time,
spared by the team for is implementation. In more cases the marketing
research is still a labour
-
consuming activity and especially in examining of the
questionnaires the technical means cannot help us. The
marketing research
may be carried out by specialized organizations (the whole research or part of
it) but if the research is carried out inside the company (the organization)

the
necessary human resources depend very much on the research volume and
the det
ermined time.

The following parts give knowledge about the time required for the
implementation of the different types of research activities. When we know
deadline and the determined time we cam define the number of the necessary
for the purpose people a
nd if it necessary we can enlarge the team depending
on the deadline. By means of well
-
appointed additional personnel a single
person is able to do very wide researches.

3.1.

Analysis of the documents.

The

analysis

of

the

documents

is

an

activity, dependent o
n the law of
disproportionate increase of activity. In a research like ours, two days spent in
a library supplemented by one or two telephone interviews may give us a
great part of the data.

3.2.

Telephone questionnaires.

The number of the telephone interview
s, which may be carried out per day
often depends on time necessary for the selection of appropriate for interview
participants, rather than the duration of the interview itself. For the research it
is necessary to find out the appropriate for investigatio
n group of people.
When carrying out a research of the customer demand, the interviewed
person should also correspond to certain requirements


for instance, to be an
owner or to have bought a product of a certain brand. In any cases, it is
necessary to ha
ve a certain picture of the interviewed people, who correspond
to the “requirements” within the whole population. In this way we can estimate
the number of the useless telephone calls, which we will face during the
research.

For the business inquiry as we
ll as for the telephone interview it is reasonable
to accept, that finding an appropriate for an interview person will take as much
time as for the carrying out of the interview itself. On this base we can expect
to carry out 2 telephone interviews per hou
r if the real duration is 15 minutes.
For a six
-
hour working day that means about 10


12 interviews, because
there are not many people, who would work on the telephone for more than 6
hours per day. Therefore, a programme of 100 inquiries would take 10 da
ys
for one person. Having in mind how exhausting is the work of the interviewer it
is most unlikely a research programme to be carried out by one person.

3.3

.
Direct questionnaires.

In carrying out of direct interviews significant time for traveling is lost.

When
the research covers companies with a programme of questionnaires among a
small but well selected from the whole country group (for instance, producers

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of electric batteries) you can interview one or two persons per day. Their
number may be increased
to 4

5 per day, if the sample (the group) is
concentrated in the big cities or in industrial zones. In any case, the direct
inquiries of this type take much time and are expensive.

The inquiries of customers in their homes among a preliminary selected gro
up
face similar problems. If we use preliminary selected addresses the results
(effect) will be increases. Very often, the task is to interview a certain number
of people selected by specific demographic criteria. This is known as a partial
sample. Finding

of people, who correspond to the specified conditions,
becomes more difficult and difficult for the interviewers with reaching the end
of the research.

The inquiries on the street seem to be most efficient from the point of view the
expenses. The time f
or finding of appropriate for interviews people is about
the half of the duration of the inquiry itself. During a successful day the
interviewer may carry out on the street about 40 inquiries with average
duration of 5 minutes
(
this supposes 6
-
hour working

day).

A programme of
500 such inquiries requires 10


12 days for its implementation. Thus the
inquiries cover bigger regions


a research in 5 big cities will need 2
-
3 days
work of one interviewer in each city.


3.4.

Group discussions.

Small investigator tea
ms are able to carry out group discussions. It is possible
to have two groups during one evening (each discussion could have duration
of one hour or an hour and a half). Therefore, eight groups could be involved
in a week. The group may be preliminary orga
nized as a team and the actions
during the investigations have to be recorded. It is necessary to find an
appropriate working place afterwards to reregister the data.

3.5.

Researches via post.

They also could be carried out by a small team


even by a single p
erson, as
well as the permanent staff of the company could be involved in processing of
the received mail.
обработката на пощата.

3.6.

Analysis of the data.

Even if we have computers every type of investigation, including one that uses
standard questionnaires,
requires people for decoding and analysis of the
filled in questionnaires. An indicator for the duration of the necessary time
may be the following example: 500 questionnaires 4 pages each with two or
three open questions require at least 7 working days in

order to prepare and
process the data before entering them in a computer.

If we are experienced and succeed in the correct estimation of our time and
we have the necessary for the purpose team, we can finish the research on
time.
Figure 10.1.
presents a

plan of the necessary human resources for the
research.


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Figure [10].[Part 1].
Worksheet: Exhibit plan of resources.


The planning of the resources is closely connected with financing and
determination of the schedule. The proposed plan of resources ma
y be
connected with the sheet for calculation of expenses, shown on Figure

9.1.

The resources for supply necessary for carrying out of the marketing research
are a few and unspecialized: all of them may be bought as a service. Where it
is necessary to proc
ess the data, one can use specialized software products.


Part 2

Research in the company office


desk research


Content map
:

1.

Carrying out of the research from the office

1.1.


Choosing a sample

1.2.


Receiving of additional information about the products

1.3.


Ensuring

of the economic base of the research

1.4.


Estimation of the size and market trends

1.5.


Providing of information about the companies

2.

Where can we look for data?

2.1.


The State and the Central Statistic Organization as information source.

2.2.


The custom’s and excise offi
ces as information source
.

2.3.


The agencies for regional development and business centres as information


source
.

2.4.


Chambers of Commerce and Industry as information source
.

2.5.


Industrial Associations as information source
.

2.6.


Reference books as information
source
.

2.7.


The press as information source
.

2.8.


Commercial magazines as information source
.

2.9.


Your own company as information source
.

2.10.


The reports on marketing studies as information source
.

3.

Searching of published information about the market size

4.

Searching of i
nformation by using of current data bases


Learning goals


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In this part we try to show the carrying out of the research in the company
office, from where we have to look for information and a list is given to the
trainee, which will be useful in the invest
igation process.

Indication of workload required to finish the unit
:

Strictly individual in conformity with the individual characteristics of the trainee

Previous knowledge required to complete the unit:

Good general knowledge

List of what the learner nee
ds to have at hand:

Computer and Internet access

Body of the text

1. Carrying out of the research from the office



Some researches may be carried out entirely from the company office.
Imagine that your boss sets a task to find out everything you can about

the
market of plastic packages for food products and the deadline is only one day.
In this case it is obligatory to rely on a desk research from the office, because
you have no time to organize a research.


The

quality

of

your

report

prepared
only

on

desk

research

will

depend

on

the

available

information and its actuality and the time you have to prepare it.



A good researcher knows the information recourses and is flexible and
incentive in their use. For instance, a good company is interested in using
plastics in packaging of food products. There may be a little information or no
published information at all about the concrete market of plastic packages for
food products. But there may be rich information about the markets using
these products


produce
rs of dairy products, margarine, soft drinks, etc. By a
simple addition

of several products we can calculate the weight of the empty
packages for yoghourt, margarine, butter, soft drinks, then we shall multiply by
the sold units (data which can be easily o
btained) and we will receive the
rough data of the market for plastic raw materials for the food sector. Thus we
can obtain information about the product for which there is no published
information


in connection with other products about which we have
in
formation.

The data analysis is often used in parallel with the methods for collecting of
primary data during the preparation of the marketing researches’ reports.

The list below outlines five importance areas where the desk research from
the office may

be of great interest:

1.1.


Choosing a sample.

The published primary lists include people and companies to be interviewed.
They can be found in the lists for elections, in the telephone directory, in the
lists of the former customers and trade directories.


1.2.


Receiving of additional information about the products.

The research for gathering of information about the product includes:
observation (to be observed the products, which are in use or in the shops);
buying of products and their utmost use; gathering o
f literature about product
sales; watching the product advertisements.


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1.3.


Ensuring of the economic base of the research.

The reports of the marketing research need to have a justification, which
serves as a base for location of primary information. Th
e research on the
usage of plastic packages in food industry may be more intelligibly if we
develop a part, which deals with the trends in the development of packages
for as a whole. The larger is the sphere of investigation, the bigger is
possibility to f
ind appropriate publications.

1.4.


Estimation of the size and market trends.

The state, the commercial organizations and companies, which perform
marketing researches, publish many statistical data about the production,
import, export and products’ sales. S
ometimes these data are only the starting
point for market analyzing, especially if the product we are interested in has a
small market share. It may be necessary to find precise data of the market by
means of a field research.

1.5.


Providing of information a
bout the companies.

The research from the office may give you a significant quantity of information
about the companies. It may disclose their turnover and financial
achievements, methods of advertising, distribution networks, prices, etc. This
informatio
n can be found in the accountancy books of the company,
newspapers, and literature about the given product, reference books and
articles in magazines

2. Where can we look for data?

The

research

from

the

office

is

facilitated

by

the

fact

that

a significant

part of
the data is collected in one place in the libraries. A good library possesses the
bigger part of the necessary reference books. It has wonderful archives of
industry, company card index, magazines and reference books on subject we
are interested i
n.

The current databases collect together much information from newspapers,
magazines and reports on marketing researches. They allow the market
investigator to accelerate the processing of the extensive lists of data at
moderate prices. A big variety of
databases may be selected on the base of:



Sources
(
some include one or two magazines);



Product
(
some include products as rubber or plastics, other plastics and
chemicals, etc.);



Subjects

(
some

include


Marketing
”,
other



Engineering
,
etc
.);



Companies (
some of them a current “reference books)
.

Besides

the

libraries

and

the

current

data
bases
there

are

many

other

resources
,
which

are

used

during the research from the office. The financial
information may be received from the Chamber of Commerce and Industr
y or
from Regional development Agencies, while the statistic information is

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received fro the Statistical Bureau. In addition


the observation in shops and
on the streets may be very useful.

Now we will review the information sources, which the investiga
tor should be
acquainted with during the analysis of the documents.

2.1.

The State and the Central Statistic Organization as information source.

The State collects different data almost about everything


from our public
habits to the goods we produce. The Sta
te needs this information in order to
control the economy. As a by
-
product the information is available to the whole
society free of charge or at part of the price. The Central Statistical
Administration is the centre of the process of information gatherin
g.

Many state publications may be bought at very low prices from the
corresponding statistical bureau.

What can we search there?

-

A guide of the official statistical information, which may give information what
could be found in the different state publ
ications;

-

An annual selected parts of statistical information, giving information about
economy, demography, construction and industry, etc.

Part of the statistical information is gathered and processed in a planned
manner, part of it may be gathered af
ter a concrete order of an interested in it
organization.

2.2.

The custom’s and excise offices as information source.

The State has declared the information from some departments for data